LAST MOVE DOWN

Wairarapa Times-Age, 7 May 1938, Page 7

LAST MOVE DOWN

DEVALUATION OF THE FRANC STATEMENT BY SIR J. SIMON. NO LOWERING OF DOLLAR ON STERLING. RUGBY, May 5. A statement on the devaluation of the franc was made by Sir John Simon, Chancellor of the Exchequer, at question time in the House of Commons. “At the beginning of the week France informed us that she did not consider it possible that the franc could be maintained at its then level, and that she was contemplating a lower rate,” said Sir John. “France made a similar communication to the United States, and, as is provided in the tripartite agreement, consultations between the three Governments then took place.

“France has given an assurance that it is her intention to achieve, as the eventual result of her policy, a rate corresponding to the economic position and giving to France no competitive trade advantage, and that the present downward movement will be the last. In these circumstances, after consultation with America, and in agreement with America, we reached the conclusion that the action being taken by France should be regarded as not inconsistent with the tripartite agreement. That agreement, in the view of all three Governments, continues with full force and effect.” Sir John Simon was then asked iif the Government contemplated that no further approval should be given to unilateral devaluation of the franc or dollar.

He replied: “We will deal with the situation as we find it. The honourable gentleman has referred to the dollar. As I have seen in newspapers a wild rumour suggesting that there might be a lowering in the value of the dollar, may I take this opportunity of saying that it has been officially denied in Washington. Equally, of course, we are not contemplating any adjustments of sterling exchange.”

AMERICAN VERSION. PRESENTATION OF UNITED FRONT. NEW YORK, May 6. Britain and the United States, though opposed to the step at present, acted quickly together to assent to the new French devaluation order, to present a democratic united front against the Axis meeting in Rome. Collapse of the franc would have brought disruption of trade with Britain,, the United States and, France and plunged them into a currency devaluation war, which would have played into the hands of dictators and would have threatened France’s projected defence programme, which is regarded as a buttress to European democratic stability.